Energy cost 'may double'

ELECTRICITY from new atomic power stations will cost twice as much if the nuclear industry is privatised, an Independent on Sunday inquiry has discovered.

Estimates from both within and outside Nuclear Electric - which put its case for privatisation to the Government last week - show that there will have to be huge increases in prices to attract private investment into the business.

And if the state-owned firm, which runs all the nuclear power stations in England and Wales, succeeds in replacing existing capacity with new plants, consumers may eventually have to pay double the pounds 1.18bn they now provide each year to subsidise nuclear power.

In addition, Nuclear Electric wants the Government to free it from the 'unprivatisable risks and liabilities' of its six ageing Magnox reactors - which may well increase the cost to the public even more.

The firm is pressing for rapid privatisation because it realises that the Government will never again finance the huge cost of a new nuclear power station. It says: 'The company can and should be privatised at the earliest opportunity.'

Its proposal - made in a four-volume submission to the Government's Nuclear Review, which will decide the future of the industry - will be taken seriously by ministers because the firm has done startlingly well since being set up in 1990. It has increased its output by almost 45 per cent, doubled productivity - and cut 4,500 jobs. It has increased its market share from 16 per cent of the electricity sold in England and Wales to 23 per cent, and has dramatically reduced the number of accidents at its reactors.

Yet the average home still subsidises nuclear power by an estimated pounds 54 a year. In all, this hand-out, which is supposed to end in 1998, will total pounds 9.2bn.

Between 1975 and 1988 the UK Atomic Energy Authority alone received more than pounds 10bn (at 1986-7 prices), compared with only about pounds 156m for research on energy conservation and pounds 154m for all renewable sources - such as solar, wind, tide and wave - put together.

For years, as the nuclear industry now admits, atomic energy was also heavily subsidised by coal-fired electricity, even though the Central Electricity Generating Board and ministers insisted that it was cheaper to get electricity from the atom than from coal.

Nuclear Electric was set up, complete with generous subsidy, after it became clear the power stations were unsellable. Michael Heseltine, President of the Board of Trade, has said that 'the subsidy is to deal with the decommissioning of old and unsafe plants' and Nuclear Electric added that it was 'not intended to be a subsidy for our ongoing commercial operations'. But the firm has admitted spending pounds 2bn of it on building its new Sizewell B Pressurised Water Reactor.

Nuclear Electric now wants to build twin reactors next door at a cost of pounds 3.5bn, but realises that this requires private capital. It admits that electricity bills will rise because investors will require an 11 per cent return on their capital, compared with 5 per cent by the state. It estimates that electricity from Sizewell C will cost 3.7p per unit - much more than the average cost of 2.4p for electricity and 3.1p for nuclear electricity.

Dr Gordon MacKerron, one of Britain's leading experts on the costs of power generation, says that the eventual figures will be much higher. 'Nuclear Electric has set out to get the numbers as low as they can squeeze them. They are neither plausible nor credible.'

An unpublished report by the Hoskyns Group of management consultants, financed by British Coal, estimates that electricity from Sizewell C could cost between 5.82p and 7.35p per unit. A Greenpeace study estimates that the public could have to pay a pounds 2.37bn subsidy if Nuclear Electric supplied a quarter of the country's electricity from new stations.

Nuclear Electric says nuclear power deserves such special treatment because it will help provide security of supply and because reactors do not produce the pollution that cause acid rain and global warming.

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
Friends is celebrating its 20th anniversary this year
tvSeries celebrates 20th anniversary
News
news
Life and Style
Jack Cooksey goes for the grand unveiling - moments before dropping his new iPhone 6 on the floor
iphone launch
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Sport
Yaya Touré (left) and Bayern Munich’s Spanish defender Juan Bernat
football
Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Primary Supply Teacher - Loughborough

£90 - £120 per day: Randstad Education Leicester: Are you a Teacher looking fo...

Primary General Cover Teachers

Negotiable: Randstad Education Leicester: Are you a Newly Qualified Teacher lo...

Part Time Primary Teacher

£90 - £120 per day: Randstad Education Leicester: Part Time Primary TeacherOur...

Science Technician

£7 - £8 per hour: Randstad Education Cheshire: The Job:School Science Technici...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week